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Let's Explore the Most Effective Customer Retention Techniques (With Examples)

Alekh Verma | February 7, 2023
customer retention

Leads, Customers, and Sales. These are the three main goals of any business, no matter how big or small. However, where most businesses falter is that they focus too much on generating leads and turning them into sales than focusing on retaining their existing customers. It’s important for a business to generate leads and acquire new customers but it’s far more important to retain the customers that they already have. According to a study, 68% of sales of a business comes from its existing customers, thus, it becomes important that you start focusing on retaining your existing customer base alongside generating leads.

As a business, your main focus should be on creating a loyal customer base. Never undervalue the influence of committed customers. According to Brandongaille, 12 to 15% of customers are devoted to just one merchant, and they account for 55% to 70% of sales. Since they consistently use your goods and services, devoted clients are unquestionably your most valuable resource.

Don't rely on visitors who accidentally land on your website, place a purchase, and then go right away without thinking about returning. Instead, focus on customers that keep coming back to your business, or better apply the tactics that will make customers keep coming back to your business.

Let's briefly go through what customer retention is and why it's vital so there are no questions in your mind before we explore the strategies for retaining customers.

What Do We Mean When We Talk About Customer Retention?  

Simply put, customer retention refers to actions a business takes to keep customers from defecting to another one of its competitors. The majority of businesses place more emphasis on customer acquisition than on customer retention. In actuality, about 44% of businesses prioritize customer acquisition, about 18% prioritize customer retention, and about 40% prioritize both equally. Customer retention, however, really costs businesses a lot less money than customer acquisition. All research on the topic of retention vs. acquisition shows this pattern, but it's difficult to quantify exactly how much less expensive; some studies claim five times, while others claim as much as 25 times.

If customer retention is less expensive, why are so many businesses concentrating on acquisition? The straightforward response is that all businesses require both, and more new clients mean more people you can persuade to continue doing business with you and using your goods or services.

Why Customer Retention is Important for Your Business?

Recognizing the levels of loyalty and happiness in your clientele base is made easier with an understanding of customer retention. It also draws attention to the success of your customer service strategies and flags any flaws that can turn away future clients. You contribute to the long-term success of your organization by strengthening consumer loyalty. Here are a few of the primary arguments in favor of why client retention strategies are essential for all businesses.

  • It’s cheaper compared to customer acquisition

The expense of executing strategies to keep current consumers is significantly lower than the cost of acquiring new ones. In fact, according to recent surveys, 82% of businesses claim that customer retention is far more cost-effective than customer acquisition. After making a purchase, the buyer already has an idea of your brand and the complete experience. Finding new potential consumers and guiding them through the marketing funnel is significantly more expensive than doing so for an existing client who has purchased from you in the past.

  • Increased AOV (average order value)

If customers stick with their favorite brands, existing customers are more likely to be eager to spend more and make more frequent purchases. According to studies, selling to an existing customer is more likely to succeed (6-70%) than doing so to a new one (5–20%). Retaining current clients is not only more cost-effective but is also considerably more profitable. According to research, consumers that are devoted to you are 31% more likely to place orders with you that are more expensive on average, which ends up increasing our average order value.

  • Long-term Profit

Customer retention approaches can be included in your marketing strategies to increase long-term revenues. Customer satisfaction and care have a favorable effect on the success of your firm as a whole. According to research, a 5-percent improvement in customer retention can enhance profitability by anywhere between 25 and 95 percent. In addition, 93% of customers are more inclined to make a second purchase from a company that provided great customer service. The likelihood of existing clients' loyalty increases when you put time and effort into serving them.

  • Provides free exposure

Customers that are loyal to a brand often talk openly about their memorable and satisfying interactions with them. As a result, long-term customers frequently tell their friends and family about your company, acting as brand ambassadors. One of the most crucial elements in word-of-mouth marketing is client loyalty, which is increased by a strong customer retention policy. Research reveals that 81% of consumers prefer recommendations from friends or family to recommendations from businesses, demonstrating just how much word-of-mouth marketing can benefit a company.

It's essential to fully comprehend your brand to develop a successful retention plan. You may assess the efficacy of your client retention plan by monitoring important KPIs. Every firm should have a strategy that includes monitoring and data analysis to continuously improve. Let's go on and talk about some client retention strategies that have worked for other firms in an effort to get some ideas on how your company may use them.

10 Examples of Tried and Tested Customer Retention Techniques  

1.  Use Customer Service Tools

Good customer service is one of the most basic, yet important services every customer expects from any business. When it comes to doing business with a firm, customer service quality is frequently seen as one of the most crucial elements. Happy clients are more likely to be the outcome of prompt responses and customized solutions than they are to be of a lack of interaction or impersonal, automated messages. Even though it's essentially impossible to have a perfect record, adopting top-notch customer service solutions in the form of tools will help prevent any bad feedback. Just as crucial as resolving client difficulties throughout the buying process is resolving issues after the sale.

Example: Santa Cruz Bicycles

When Santa Cruz Bicycles realized its current method of customer assistance was not working, or rather couldn’t handle the additional workload as the business was getting bigger, they decided to move towards using customer service tools to streamline and reduce the workload instead of hiring additional staff. CRM was used at first to track customer interactions and generate support tickets. The HubSpot task tool was used by representatives to mark open support cases and guarantee that each ticket received a prompt response. This improved client satisfaction while keeping the Santa Cruz support personnel organized.

Additionally, moving forward the support staff needed a more sophisticated tool as the business expanded for its everyday operations. To centralize customer service operations, the company implemented Service Hub. This meant that all support requests were directed to a common mailbox where representatives could work together on challenging service cases. This improved the team's chances of reducing churn by making it simpler for them to simplify important or delicate topics.

2.  Make Personalization Your Best Friend

Personalization is crucial when executing customer retention tactics since it helps clients feel heard. You can use the data you collect to segment your customer base, which you can then use to build personalized experiences and provide customers with the information they might require. When providing customized customer service, which is equally vital, it demonstrates your willingness to get to know customers personally and understand their unique needs to provide suitable solutions. According to studies, personalized emails generate 6 times more business. Making an extra effort to comprehend your customer improves the experience overall and makes it more memorable.

Example: Tesco

With almost 4,000 locations across the country, this grocery behemoth is well-represented in the UK. Being human and real when representing such large corporations can be difficult. Despite the convenience of self-service scanners and online grocery shopping, consumers still prefer interacting with other people. Tesco employees decided to use Twitter as a tool to provide customer care with a personal touch since it is still necessary. By bringing personality to their contacts with customers, they demonstrate that they care.

Identify your audience personas and interact with them through their chosen channels to start using a strategy like this. Whatever captures their attention, whether it's email or Snapchat, is what matters. From this point on, you should encourage clients to contact you through that route directly. Include a reminder in your messaging and do it both during and after the purchasing process. Additionally, give every communication personality and make it more specific to individual customers. Make sure everything you're communicating sounds like it's coming from a human since nobody loves a scripted response.

3.  Educate Your Customers

All requests for customer service do not necessarily have to come from the customer's side. A wonderful strategy to provide individualized experiences with information about your business is to make an extra effort and make resources available to them before or after a purchase. This includes how-to guides, advice blogs, and one-on-one training chances for tasks that require some assistance from an expert. Publishing an "Academy" section on your website for people who wish to learn at their own pace is another method to provide materials. To retain customers, it is important for them to feel supported and like they have a resource for questions. This will influence a consumer's decision to buy favorably across the entire customer experience, especially for first-time buyers.

Example: HubSpot

One of the most useful things you can give your consumers is education (or even just your site visitors). Anyone may learn from and advance their abilities using the free marketing, sales, and customer service training videos and certifications offered by HubSpot Academy, though some are only accessible to HubSpot users and partners. The HubSpot community is more engaged and eager to keep up with our educational initiatives thanks to these distinctive, special services.

Providing such educational content on your website or apps not only makes the customer feel special but also reduces the chances of customers having to contact customer service for any minor inconvenience. They can easily refer to the how-to guides on your channel instead of contacting the customer service team to solve some of their problems.

4.  Show That You Care

If there’s one thing that’s universal in the business world across all sectors, it is that customers love to feel valued. You’ll never find a customer who’s complaining that a business is sending them too many gift hampers or samples of their new product or just sending some personalized thank you notes.

Regardless of what product you’re selling or what service you’re providing, incorporate this tactic in your business plan to show gratitude to your loyal customers. Send some short messages or modest surprises that represent your brand to make your customer feel appreciated. This gives the client a pleasant feeling and persuades them to stay with you. Small gifts are also frequently shared on social media, which helps you spread the word about your business while also conveying a feeling of intimacy with your clients. When it comes to exceeding consumer expectations, it is always worthwhile to go the additional mile.

Example: Chewy

Chewy, an online retailer of pet supplies, is aware that its clients love their pets. It is also aware that people may get pet food and accessories at comparable costs from several retailers, including Amazon. Therefore, it employs the theory of surprise reciprocity to surprise its clients with last-minute presents and cards for their animals. These gifts don't have to be extravagant or large to leave a lasting impression on their recipients' furry offspring.

5.  Provide Incentives

Customer incentives are meant to reward customers for taking actions that promote the brand. An incentive program appeals if you provide customers with something worthwhile for little to no cost in exchange for being a brand advocate. Each customer incentive that is successfully redeemed benefits your company because it essentially acts as free advertising.

Customer incentives are essential for expanding your brand's reach beyond your current clientele. An excellent loyalty program often improves people's perceptions of your brand and makes them feel good about obtaining a deal. As an illustration, think of rewarding customers who share your brand's social media posts with prizes, a gift card, or access to particular services. According to research, 67 percent of customers prefer reward programs since they feel more driven to support the company.

Example: Adobe

Adobe offers monthly subscriptions for Creative Cloud Apps, tying users to the service for a full year. To preserve their Creative Cloud subscription if customers decide to cancel early, they can choose to receive up to two months without fees.

The corporation is offering two months of a free subscription on purpose to keep consumers, and they are doing so at a time when customers are trying to decide whether they want a long-term connection with the company. By intervening at this point, Adobe is encouraging customers to hang around a little longer so the company can demonstrate its worth to them. By providing special attention to these customers, your company may advance this strategy. To learn how you may improve their experience over the next two months, follow up with them via phone call or tailored email.

6.  Build a community

One of the essential components of any successful brand is connecting with its audience. Customers like to interact with other people, not with businesses, thus building an online community of your clientele will help you achieve your retention goals.

Even though we live in a technologically advanced world, customers still care about being heard and developing relationships with the businesses that provide the goods and services they want as well as with other customers. Customers can connect with people who can help them flourish in a community, such as thought leaders and other devoted customers with experience. This allows the customers to establish worthwhile connections and have deep conversations about the market and your product or service.

Example: Flo

Flo provides a top-notch platform that forecasts, examines, and keeps track of personal health information for those who want to manage their reproductive health. The software provides a calendar so users can see when their cycles start and end simply, and it also provides daily health insights to help users make sense of all those forecasts.

The community within the app is what distinguishes Flo from its rivals and aids in client retention. Each user is paired with a virtual health assistant through Flo, and the platform even offers spaces for anonymous chat rooms where users may confidentially discuss their health concerns.

The community within this app fills the gap that some individuals may have as they wait for medical findings, consult a doctor, or look for recommendations for the best items to use, even if none of the offers Flo makes to its users are intended to replace expert medical advice. Because it is difficult to find a strong community like this one, Flo can keep clients with this special value addition.

7.  Talk To Your Customers

It's crucial to stay in touch with your customers at all times. There are numerous ways to communicate with your audience, learn what they think, and show them that you are engaged. One of the most often utilized methods of routine communication is email automation. Even now, email marketing generates, on average, £42 for every £1 invested in campaigns. Sending newsletters, recently released studies, or customer surveys allows you to keep your consumer base informed about business developments while also collecting insightful feedback. Regular use of social media channels is essential for preserving client contact.

Example: R&G Technologies

R&G Technologies is an Australian provider of IT support services that have solid, ongoing connections with its customers. It strengthens these connections through prompt responses and stringent service-level agreements (SLAs). They respond to clients swiftly, and by linking these KPIs to employee pay, they have gained the support of their staff.

The most important lesson, though, comes from its customer satisfaction surveys. Clients of R&G Technologies are given the chance to share good and bad experiences. This enables the business to find dissatisfied clients before they leave.

8.  Gamification Is the Way to Go!

Gamification is a fantastic technique to keep customers engaged and reward devoted ones. It has been well known as a very successful client retention approach as a result of its success. 87% of merchants intend to include gamification in their marketing strategies during the next five years.

You can encourage people's competitive inclination in exchange for rewards by including gaming aspects into straightforward chores. Progress tracking, reward tiers, and a reloadable point system are a few examples of gamification in the workplace. Every corporate objective can, more often than not, be gamified in some form. Buying items, recommending them on social media, and offering referral discounts are all effective strategies to compel and promote customer connection.

Example: MeUndies

The staff at MeUndies had become weary of the search for a fantastic, comfy pair of underwear. Which leads them to develop a strong culture where they are very open about their production process. Although this helps with retention a lot, our attention is on their inventive referral scheme. Customers are encouraged to suggest friends from the minute they make a purchase, and it pays off: for each person you refer, you receive $20 and they receive 20% off their first purchase.

There is a "nudge" button and a gamification component that shows how far along your friend is in the purchasing process. You can use this to send an email reminder if a friend adds a product to the cart but doesn't finish the checkout process. In other words, MeUndies has discovered a way to leverage its existing customer base to lower cart abandonment while simultaneously generating social proof.

9.  Use Subscriptions to Enhance Experience

Since they primarily serve repeat customers, businesses that provide subscription services place a greater emphasis on customer retention than on customer acquisition. Competitive pricing is only one factor in client retention; quality and corporate standards are what keep customers coming back. Given that 63% of publishers say that turning their audience into paying subscribers is a major difficulty when building products, it becomes one of the most difficult parts of client retention.

The solution in this situation is to add personalization and customize the consumer experience since subscriptions offer long-term value that is worth a monthly fee. It's crucial to come up with innovative strategies to be current and valuable if you want to maintain your customers' interest. Another thing to consider is convenience, which might include bundles, having all services in one location, or having accessible capabilities on mobile apps.

Example: Amazon

It's unusual for a company with a commodity-based business strategy to incorporate a subscription service. This is precisely what Amazon did by introducing Prime. Initially, the subscription was developed to offer customers speedier delivery. It caused a great deal of criticism but quickly gained favor with regular platform users.

This gives rise to the question- How might subscriptions help you reach your growth objectives and boost client retention?

Gaining consumer loyalty with your subscription model doesn't require a cost. Another inexpensive way to use this strategy is to offer rewards in the form of exclusive content and events. If you're going to directly copy Amazon's strategy, make sure you're providing something your customers desire. This relates to customer development and comprehending the needs and difficulties of your audience.

10. Leverage Social Proof

When it comes to retaining a customer, one must not forget to focus on Social Proof. It is a brilliant way to advertise your brand and at the same time increase, customers' trust in your product or service. Social influence significantly affects how buyers perceive a brand. You increase customer trust if testimonials about your goods or services are posted on social media. To put this into context, 82% of people who are looking to buy things trust social media platforms for product reviews. In this day and age, customer reviews are crucial, especially given that the majority of consumers are inundated with conventional sales pitches.

Compared to generic and irrelevant commercials, advertising on social media platforms is organic and natural. Real success stories and testimonials are more realistic when they are published and shared, giving customers a clearer picture of what to anticipate.

Example: Codeacademy

Codeacademy leverages social proof to demonstrate to potential consumers the value of its products by utilizing testimonials and customer success stories, which come directly from the users themselves.

More than 97% of consumers say that internet reviews have an impact on their purchasing decisions. FOMO, or the feeling of being left out of something, is a potent marketing and customer retention strategy. Utilize consumer reviews and feedback to draw in new clients and persuade current ones to buy more of your stuff. Promote devoted clients and their success stories on your website or social media platforms to help you expand your own.


Building a strong client loyalty program can be accomplished using a variety of entertaining and interesting methods. You can maximize client retention by giving customers the chance to feel valued, benefit from fantastic bargains, and feel a part of a community. You amass willing brand ambassadors who establish a foundation of devoted clients in exchange for these customized experiences. You receive bonus points in the eyes of customers by making an extra effort, such as creating gamified incentive programs or just ensuring timely responses with top-notch customer service.

You may strengthen your relationship and express gratitude to your loyal clients by keeping them informed and engaging with them. Nobody enjoys doing business with a company that makes their consumers feel as though they are doing them a favor. Watch how far your customer loyalty programs can go if you invest equally in the general quality of your goods and client services.

Alekh Verma

CEO and Founder at eSearch Logix Technologies!

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